Antitrust Burden-Shifting Would Be A Trial Lawyer Cash Cow
Senator Amy Klobuchar (D-Minn.) has introduced “The Competition and Antitrust Law Enforcement Reform Act,” legislation that would weaponize U.S. antitrust law and overturn decades of enforcement precedent.
One of the legislation’s most egregious provisions flips the burden of proof for monopolization litigation from the plaintiff to the defendant. If implemented, this burden-shifting provision would drastically increase the amount of monopolization cases brought to court, allowing predatory trial lawyers to make a fortune by gaming the American legal system.
Under current law, trial lawyers and government antitrust enforcers can sue companies for alleged anticompetitive practices. In both scenarios, the burden of proof is rightly on the plaintiff to prove that a company is engaging in exclusionary, anticompetitive conduct.
The Klobuchar bill would flip this process on its head by requiring companies with “significant market power” to prove that their behavior does not “materially disadvantage” their competitors. In effect, this presumes that the business practices of large companies are automatically illegal unless the company can prove otherwise.
At the same time, the Klobuchar bill dilutes the standard of exclusionary conduct, described by the U.S. Court of Appeals for the D.C. Circuit that in order “to be condemned as exclusionary, a monopolist’s act must have an ‘anticompetitive effect.’ That is, it must harm the competitive process and thereby harm consumers. In contrast, harm to one or more competitors will not suffice.”
Instead of focusing on harm to the competitive process, Klobuchar would weaponize antitrust law to protect politically favored companies from being out-competed by rival firms. This misguided approach flies in the face of decades of antitrust precedent at the expense of American consumers.
By shifting the burden of proof to the defendant and weakening the exclusionary conduct standard, the Klobuchar bill guarantees a dramatic increase in the number – and likely success of – monopolization cases brought against large companies.
The new rules create a cottage industry for plaintiffs that accuse companies of anticompetitive behavior in court whether they are guilty or not. Given that the potential damages resulting from these lawsuits can be enormous, even companies who have done nothing wrong would be forced to pay large sums to avoid an adverse decision in court, opening the doors to a massive windfall for greedy trial lawyers.
Above all else, the burden-shifting provision in the Klobuchar bill would harm American consumers. Large companies under constant threat of predatory, frivolous antitrust litigation would be less likely to innovate or engage in robust competition with rival firms. This would lead to reduced access to goods and services as well as higher prices and less choice for consumers all across the country.
Needless to say, this is the wrong approach to antitrust policymaking. Instead of focusing on a consumer-based approach to antitrust regulation that protects the competitive process, Klobuchar would rather create opportunities for greedy trial lawyers to make a killing by taking advantage of the American legal system.
Congress should reject The Competition and Antitrust Law Enforcement Reform Act.